20 April 2011

Johannesburg, 20 April 2011: Sephaku Cement today announced the establishment of its second major project, a 3,000 tonne per day clinker and cement production facility near Dwaalboom in Limpopo Province, some 300 kilometres north-west of Johannesburg in South Africa. The go-ahead for this project follows the recent completion of a 12-month limestone prospecting programme in the project area. Africa Geo-Environmental Services (Pty) Ltd (AGES) has been appointed as environmental consultants for the environmental authorisation application and the new order mining right application.

Construction on the plant is anticipated to begin in 2013 once the Aganang project moves into production. The experience gained in building the Aganang plant will ensure the necessary expertise and team is in place to begin construction on the new plant.

Sephaku Cement MD Pieter Fourie said today, “At Sephaku Cement we remain firmly of the view that the South African growth story is not yet over, and that it has legs deep into the future. In addition, we foresee shrinking clinker capacity for the next five to eight years. Given the lead times required for projects of this nature we believe that Sephaku Cement will be extremely well placed in the sector when our second plant comes into production in 2015.”

This news follows on the investment by Dangote Group into Sephaku Cement in late 2010 and Dangote Group’s planned $3.9 billion investment into the construction of new cement plants across Africa as announced on 13 April 2011. This investment will include new cement lines being produced in Ethiopia, Tanzania, the Republic of Congo, Zambia, Senegal and Gabon and increased capacity in South Africa, Cameroon and Nigeria. The Dangote Group’s separately-listed entity, Dangote Cement, is the largest quoted company in West Africa with a market cap of US$13bn and its pan-African investment drive is key to its vision of a continent self-sufficient in cement production.

Sephaku Cement’s existing operations, Delmas and Aganang, have progressed significantly and remain on track for cement production by mid-2013. Recent changes in the scope of the existing project have resulted in an increased capacity from 2.2 million tonnes per annum to 2.5 million tonnes per annum with a minimal, three-month delay to the production timeline.

Aganang

Construction has started on the permanent access road and follows on the completion of the temporary four-kilometre access road which provides for equipment deliveries to site. The building on the site offices and camp is in the final stages, and provides offices, sleeping quarters, a kitchen, clinic and change house for up to 1,200 individuals. All data and telephone lines have been installed. The Sephaku Cement project team site offices have been completed and are fully functional.

Given the pressure on Eskom’s available resources to supply power to new projects, Aganang is in the fortunate position to be receiving permanent power from a 42-kilometre 132kV line. In the meantime, construction power of 2MVA at 400V is available on site from an existing Eskom line. A generator is available for backup power in the event that this becomes necessary.

Delmas milling plant

Infrastructural progress, a critical component of the project has been both rapid and thorough. The temporary access road to the construction site was completed on schedule in March 2011 and is available for deliveries to the construction site and the offices. Similarly the bulk services for water and sewage and electricity, were installed in the second half of 2010.

Construction is nearing completion at the Sinoma campsite, where the office block has already been populated, with all electrical installations also complete and signed off by a professional electrical engineer. Similarly, at the Delmas project team site offices, the necessary power connections and data networks have been installed. The entire property has been secured with an electric boundary fence.

The geotechnical investigation and analysis of the revised plant layout has begun. A total of 15 holes are being drilled for sampling activities. Samples will also be taken from ten test pits and 20 augered boreholes, to be followed by lab analysis and reporting. These activities should be completed by the end of May 2011.

In terms of the company’s EMP a baseline environmental monitoring system which covers water, dust deposition and noise, is now 66% complete.

Queries:

Pieter Fourie, Sephaku Cement
+ 27 12 686 4800 (tel)
+ 27 79 492 1850 (mobile)/

Nicola Taylor or Charmane Russell, Russell and Associates
+ 27 11 880 3924 (tel)
+27 82 927 8957 or + 27 82 372 5816 (mobile)